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Innovation Programme News |
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Mme Edith Cresson, Commissioner for research, innovation and education, announced the selection of the first nine funds in December. They were chosen for their ability to boost the level of early stage investment in technology projects.
Of the nine operations (see table), three are UK-based and three German, with one each in France, Belgium and Austria. Six of the funds have an EU as well as a purely national investment remit. All nine will focus on the financing of technology-based companies, and they have a combined investment capacity of 300 MECU, of which 186 MECU will be exclusively available for early stage high-tech investments.
Venture capital investments in high-tech enterprises were three times greater in the US than in Europe in 1995, and those in young companies nearly five times greater (See edition 4/97). The Commission's Action Plan for Innovation makes it a very high priority to close this gap, and the I-TEC scheme has been launched, in collaboration with the European Investment Fund (EIF), as a concrete first step. It realises the ambition expressed by last year's Amsterdam and Luxembourg European Councils to encourage the financing of high technology projects, and to build the capacity of venture capital funds to appraise and manage early stage investments in technologically innovative SMEs.
| Company | Country | I-TEC Fund | Contact | Fax |
| Alta Berkeley Associates | UK | Alta-Berkeley V | Hugh Smith, Chief Financial Officer | +44 171 734 6711 |
| Capricorn Venture Partners | Belgium | Capricorn Venture Fund/Baring Capricorn Ventures | Jos. B. Peeters, Managing Director | +32 16 29 38 71 |
| Horizonte Venture Management | Austria | Horizonte Austria Technology Fund | Franz Krejs, Managing Director | +43 1 533 56014 |
| MTI Manager Limited | UK | MTI 3 | Paul Castle, Chief Executive | +44 1923 247 783 |
| Prelude Technology Investments Limited | UK | Prelude Trust | Jayne Tamblin, Office Administrator | +44 1954 288 090 |
| Sofinnova Partners | France | Soffinova Capital II | Jean-Bernard Schmidt, President | +33 1 45 26 78 92 |
| Technologieholding vc | Germany | SET | Falk Strascheg, Managing Director | +49 89 1570 02 99 |
| Technostart Beratung für Beteiligungsfonds | Germany | Technostart II | Michael Meyer, CEO | +49 711 784 63 44 |
| VCI GmbH | Germany | Phoenix Venture Funds | Max Rueff, Director | +49 89 655 107 |
Paul Castle is the Chief Executive of MTI Manager Limited, one of the UK-based I-TEC participants. He agrees that, in general, European venture capitalists and European inventors understand one another's needs much less well than their US counterparts. MTI's own fund managers are themselves technologists, and Mr Castle believes that having technological expertise in-house is the key to successful venture capital investment in this area. But in-house expertise, although essential, is rarely enough.
"MTI is a high technology venture capital fund, investing money and management resources in British product companies at a very early stage of their development," he says. "By their nature, these companies' products and processes involve state-of-the-art, leading-edge technologies. Our fund managers all have a general technological background, but we buy in specialist expertise to support detailed technical and market appraisals in relation to the technology concerned. We think this is absolutely necessary in order to protect our investments, but it does add significantly to their initial costs."
In return for the support offered by I-TEC, the participating funds have all undertaken to increase their early stage investments in technologically innovative SMEs significantly, with a special emphasis on financing projects which exploit the results of EC-funded research. Established funds have undertaken to increase their investments in this type of project by 50%, while new funds will commit 25% of their total capital.
The new measure will establish a forum to provide I-TEC participants and other funds with information about high-tech investment opportunities - and in particular about the commercially promising outputs of Community R&D projects. Conversely, the forum will offer participants in Community R&D programmes improved access to experienced and sympathetic investors.
The Commission hopes that the two projects will interact in a positive way. I-TEC Partner will not only facilitate the application of the venture capital funds supported by ITEC itself to the exploitation of EC-funded research results. As a source of investment intelligence, it will also be of great interest to other investors. Banks in particular are expected to benefit from an increased awareness of Europe's young technology-based firms, and from improved understanding of their needs. But what of the firms themselves? Will their understanding of the needs of the banks and venture capitalists also be improved? The Commission is confident that it will.
Paul Castle's experience is that the business skills of a young company are always strengthened by partnership with a competent venture capital fund, although this improvement can take place in a number of different ways. "Occasionally, the technologists themselves enhance their commercial skills through management training," he says. "More often, that gap is filled first by management inputs from the venture capital fund itself, and later by the recruitment of professional managers. In general, our strategy is to try and free the technologists to focus on what they are best at."
Contact:
M. Verlinden, DG XIII/D-4
Fx. +352 4301 34544
E-m. marc.verlinden@ec.europa.eu
/finance/home.html
P. Castle, MTI Manager Limited
Tl. +44 1923 250 244
Fx. +44 1923 247 783
 Paul Mulvanny of Jaguar Cars Plc describing new 'head up display' technologies to John Battle, the UK Minister for Science, Energy and Industry. |
You have to go knocking on peoples' doors," says Tony Inglis of the UK's Midlands Innovation Relay Centre (MIRC). It's easy to believe that this simple philosophy of personal contacts and hard work forms the basis for the success not just of MIRC but of the eight other partners in the IRC Automotive Group, and of the Group as a whole. Thanks to their efforts, even the most reclusive SMEs in the automotive industry will soon be discovering the benefits of international technology transfer.
The Autotech exhibition held at the beginning of November in Birmingham, UK, clearly showed the benefits to IRCs of networking and keeping a high profile. Autotech is an important meeting point for vehicle manufacturers, research centres and technology suppliers. At the show, the Automotive Group shared a large and prestigious stand with the UK government's Department of Trade and Industry (DTI), car manufacturer Jaguar and technology companies including Texas Instruments (TI). The organisational effort was worthwhile, Inglis says: "We have had some good enquiries from Autotech."
"This is the first meeting at which the Automotive Group has presented its core image to the rest of the world: the stand, the people, a brochure, a Web site and a database of technology opportunities," adds Marco Mangiantini of the north-west Italian IRC, based in Turin. "We're not just a collection of IRCs any more, we're a solid group."
The Automotive Group itself began a year ago at the Vehicle of the Future event in Dijon, France (See edition 2/97).
Since then there have been meetings in Bilbao and Turin at which the Group members have got to know one another and agreed on a common approach to marketing the group, though each IRC retains its individual character.
"There is certainly dynamism in the Automotive Group," says Loeffler. "Each of the member IRCs in the Group has a different background, a different host organisation and a different regional culture, but we all have good infrastructures. That's important, because technology transfer is a really hard job and to make it go well you need all the parts in place."
The Group now has nine members - enough to provide support and diversity without losing the personal touch. "Other IRCs will probably want to join the Group in the future, but I think we are close to the maximum effective size," says Mangiantini. "If we reached 11 or 12 members that could be too many to manage effectively."
Paul Mulvanny, a senior electrical engineer with Jaguar, explains why links with IRCs and their clients are so important to his company. "The automotive industry couldn't work without subcontractors," he says. "We need to work with suppliers of components and systems to develop technology. For example, we need the head-up displays and in-car video systems that will differentiate our future cars from those of other manufacturers. And because the automotive industry takes only 5-10% of the global market for semiconductors - such as those used in these two applications - we also need to share standards with the rest of the world."
"In the future we are hoping to involve more SMEs - the second- and third-tier suppliers - in the technology transfer process," says MIRC Director John Latham. Swedish representative Max Maupoix agrees: "The trend to outsourcing means that the big systems suppliers get bigger, but the companies who make individual components find life much more difficult. IRCs will help the smaller companies link together, so a group of them could make complete component assemblies."
Contact:
T. Inglis, IRC-Midlands
Tl. +44 1203 838143
Fx. +44 1203 221396
E-m.mirc@coventry.ac.uk
http://www.mids.demon.co.uk/
IRC Thematic Groups - Concept and PracticeSo far, seven Thematic Groups have been formed, in the automotive, environmental, fish technology, materials, medical technology and wood sectors. The groups bring together limited numbers of IRCs from areas where these respective industries are clustered.They bring a more targeted approach - and thus a higher success rate - in partner search, partner proposal matching and technology transfer. This is achieved by fostering links between academic institutions, large companies and SMEs. SMEs are also encouraged to network among themselves, enabling them to present integrated proposals when trying to win supply contracts with large companies. The Automotive Thematic Group links: IRC-Alps (Camera di Commercio di Torino) * IRC-Bourgogne (Chambre Régionale de Commerce et d'Industrie de Bourgogne) * IRC- Rhône-Alpes (Chambre Régionale de Commerce et d'Industrie de Rhône-Alpes) * IRC-Midlands (Coventry University Enterprises Ltd) * IRC-Northern Ireland (Local Enterprise Development Agency) * IRC-Basque (SPRI Sociedad para la Promoción y Reconversión Industrial) * IRC-Western/Southern Sweden (Swedish Institute of Production Engineering Research) * IRC-Northern Germany (VDI/VDE Technologiezentrum Informationstechnik GmbH) * IRC-Wales (Welsh Development Agency) * IRC-Steinbeis (Steinbeis-Europa-Zentrum, Germany) |
ANIMATE is one of 29 projects running under the Innovation Programme's Innovation Management Techniques initiative (IMT) (See editions 4/97 and 5/97.). Oriented towards the needs of UK SMEs, the project will develop and test a structured programme to guide client companies through the preparation and implementation of effective innovation plans.
"We are running the project in partnership with the Training Company Directorate (TCD), a national body which runs a technology transfer and graduate development scheme for the government," says David Kingham of Oxford Innovation. "We are also working with local partners, currently in four specific areas of the UK. Most are Business Links and Training and Enterprise Councils - business support agencies based on partnerships between public and private sectors."
The project will train a specialist group of consultants drawn from these partners to apply the ANIMATE tools, as well as promoting the use of innovation management techniques to the partner organisations themselves. "Our aim is to create a critical mass of IMT expertise in each of the targeted regions," says Peter Baikie of Oxford Innovation. "We also hope that, through the TCD, this will provide feedback to policy development at national level."
Eventually, Oxford Innovation expects the ANIMATE tools to be widely available across Europe, and is fully engaged in a continuous exchange of information with the other IMT projects, conducted within the framework of the Access project.
Many of the ANIMATE techniques are based on the 'Innovation Action Toolkit' ('Innovation Action' is a trademark of Oxford Innovation.) developed by Oxford Innovation over the past three years. "We have also developed several new techniques," says David Kingham. "These include the Stepladder, which we use to assess how innovative a company is prior to its participation. We are also developing new toolkits for marketing and project management, which will be published in 1998."
"So often, a company's success is determined by the clarity of its goals," says Kingham. "Most know in general terms what they are trying to achieve, but many fail to pin down broad aims to specific objectives and actions. ANIMATE helps clients to arrive at their own conclusions by working through simple questions and checklists based on the experience of a wide range of companies which have faced similar challenges."
Kingham and Baikie also believe that effective management of external linkages is critical. "For most dynamic small enterprises, alliances and partnerships are essential for product development, and for entry into new export markets," says Kingham. "The key is to pick the right partner, for the right reason, and then to manage the relationship properly. For example, should you form a single tie to a multinational, or bilateral agreements with a number of companies of a size similar to your own?"
"ANIMATE helped the company to think through the options for improving its access to research," Kingham recalls. "In the end, it chose to forge links with a prestigious university, as a way of protecting its intellectual property and building credibility in the market, without the risk of being swallowed up by a larger commercial partner."
Contact:
D. Kingham, P. Baikie, Oxford Innovation
Tl. +44 1865 794 585
Fx. +44 1865 209 044
E-m. oi@oxtrust.org.uk
http://www.oxtrust.org.uk/oi/animate.htm
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